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21 August 2009

The Interplay between Copyright and Employment Law

(This post was inspired by and is in part based on a piece written by Rebecca Tushnet.)

Through the years, the ways in which the creators of artistic and literary works have been supported have varied greatly. Assuming that forgetting history is an option, the propaganda of the copyright industries quite clearly states that copyright has had a central role in protecting the creators of artistic and literary works although a close look at history suggests that this is not the case: copyright did provide protection but to printers, not to authors.

In medieval times, it was primarily through royal/aristocratic patronage that the arts flourished. Later on, the creation of artistic and literary works began to be commercialised with guilds and corporate production taking centre stage. Copyright which initially protected the interests of the Company of Stationers in England later came to protect the interests of corporations which began to specialise in the accumulation of copyrights. The Internet, however, along with changing social values virtually turned the traditional copyright business model upside down. And now, in the twenty-first
century, we’re beginning to move away from corporate production and into the realm of ‘peer production’, such as it is.

Nonetheless, non-corporate production and dissemination of artistic works is still in its infancy and for the most part, ‘corporate creation’ is dominant. Companies, however, being treated as persons only by virtue of legal fiction create nothing by themselves. This means that when one speaks of the corporatization of the creation of artistic and literary works, one is actually speaking of the creation of works by the employees, consultants and ‘contractees’ of companies, and of the ways in which intellectual property law and employment law must cohere to determine such things as the ownership of the intellectual property in works and the rights of the human authors
who create them.

There are several models available to allocate the ownership of intellectual property. In India, the Copyright Act speaks of the first owner of copyright in no uncertain terms. One would also find that there are differences depending on a number of factors including the country in which a work is created, the nationality of the author, whether the work was made under the terms of a contract for service or a contract of service. If one were to look at the entire spectrum of intellectual property, the employer and employee could jointly own rights, the employer might have an implied non-transferable licence to use a patented invention invented by an employee under certain circumstances[1] (shop right) or the employee may have an inalienable right of ownership to the work.

The problem though is that regardless of what the law says, the rights it grants authors in courts may do little to protect their interests outside courtrooms. Take the Tasini case in which the United States Supreme Court held that the New York Times could not license works of freelance journalists in back issues of its newspaper so as to include them in electronic databases such as LexisNexis. The Court affirmed the copyright of the freelancers and awarded compensation of $18 million to them. The members of the National Writers’ Union who filed the suit certainly won their case in court.

However, outside the courtroom, a Coasean transaction occurred: subsequent to this decision, the NYT deleted over a hundred thousand articles written by freelancers, and, as a result of the filing of the suit, journalists throughout the world were asked to sign new contracts to ensure that their employers would not wind up in a similar situation. The cost to the employer was negligible while both the freelancers and the public lost out: the freelancers have effectively had to forego future rights (and royalties), and the public has had to deal with decreased access to the works of the freelances. (The 18 million USD has also not yet been distributed to the freelancers.)

As for the new contracts which journalists were asked to sign, it is an ostensible fact that employment usually involves unequal bargaining power whether it be in the US, India or any other jurisdiction. The main feature of employment and labour law is to try to maintain some form of laissez faire and free market mechanism while — in a socialist state, at any rate — trying to protect the interests of labourers and employees. The law also gives freelancers rights, in this case, a copyright — ownership of the intellectual property in the works they create. These rights can be assigned to the a newspaper or other such ‘proprietor’ under the terms of a contract.

An Indian journalist employed by a newspaper may recognise that under Indian Copyright Act, the proprietor of the magazine or newspaper he writes an article for in the course of his employment will be the first owner of the copyright in the article unless he enters into a contract to the contrary. However, even knowing that he can enter into a contract to ensure that he remains the first owner of the copyright in his work is unlikely to increase the probability that he will enter into such a contract simply because effecting such a contract would require him to overcome a number of obstacles: most journalists are fungible, most need their employers much more than their employers need them and, of course, most journalists are not aware of of the intricacies of copyright law. In a nutshell, to sign a contract which allows them to be the first owners of copyright in their work, employed journalists would have to overcome both market forces and legal ignorance.

The case of a freelance journalist is slightly different: he would ordinarily be the first owner of copyright in his article unless he signs an agreement to the contrary with the proprietor of the newspaper that undertakes to publish his work. To have his rights recognised though, he would have to overcome the same problems as an employed journalist would have to overcome: market forces and legal ignorance. In the usual course, he would be given a standard form of contract to sign which would effectively divest him of any intellectual property rights in his work (most corporates having a team of lawyers to protect their interests).

There is very little that the creator of a work can do to protect his rights once he has signed a contract. Even if it is a standard contract, the courts are unlikely to interfere because its terms are ‘unfair’. While it’s true that a court may act if the terms of a contract are unconscionable, it’s unlikely that a court would interfere in the case of an employment contract: in a case unrelated to copyright, the Delhi High Court described an employment contract as the nemesis of an employee, and held that the employee was bound by its terms.

And so, even though copyright law may give an author of a work in which copyright subsists substantial rights, it would be anything but difficult for an employer or any other person who controls the publication and distribution of that work to effectively nullify the rights of the author.By Nandita SaikiaNote:
[1] If the employee was working within the scope of his employment, used the employer’s equipment and created the invention at the employer’s expense.

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